McElroy v. Continental Ins. Co.

• Decision Date: 05 March 1892
• Citation: 48 Kan. 200,29 P. 478
• Parties: ELIZABETH MCELROY v. THE CONTINENTAL INSURANCE COMPANY, OF NEW YORK
• Court: Kansas Supreme Court

29 P. 478

48 Kan. 200

ELIZABETH MCELROY v. THE CONTINENTAL INSURANCE COMPANY, OF NEW YORK

Supreme Court of Kansas

March 5, 1892

Error from Wabaunsee District Court.

ACTION to recover on a fire-insurance policy. Judgment for the defendant Company, at the May term, 1889. The facts are stated in the opinion.

Judgment affirmed.

J. B Barnes, and A. H. Case, for plaintiff in error.

Eugene Hagan, for defendant in error.

SIMPSON C. All the Justices concurring.

OPINION

SIMPSON, C.:

Action on a fire policy issued by defendant company to plaintiff for $ 2,000. The loss by fire occurred September 15, 1887. On the 28th day of December, 1887, the plaintiff commenced an action in the district court of Wabaunsee county against the defendant company, and that action was, upon motion of plaintiff, on the 18th day of October, 1888, dismissed without prejudice to a future action. The petition does not allege that the actions are the same, and that the first failed otherwise than on the merits, but uses the expression "This suit was commenced in this court on the 28th of October, 1888." The policy contained this agreement:

"It is hereby covenanted and agreed, that no suit or action on this policy for the recovery of any claim shall be sustainable in any court of law or equity, until after an award shall have been obtained by arbitration or appraisal in the manner above provided, nor unless commenced within 12 months next ensuing after the fire, exclusive of any time consumed in arbitration or appraisal."

This action was commenced the 18th day of October, 1888. The trial court sustained a demurrer to the petition, on the ground that it does not state facts sufficient to constitute a cause of action against the defendant, and that ruling is brought here for review.

The theory of the demurrer is, that the parties by their agreement have fixed a limitation of time within which an action on the policy can be commenced, and this action not having been brought within that time, any cause of action which plaintiff in error might have had on the policy by reason of the loss by fire is barred by the limitation created by the agreement. Against this contention, it is said that § 23 of the code of civil procedure, that reads: "If any action be commenced within due time, and a judgment thereon for the plaintiff be reversed, or if the plaintiff fail in such action otherwise than upon the merits, and the time limited for the same shall have expired, the plaintiff, or, if he die and the cause of action survive, his representatives, may commence a new action within one year after the reversal or failure," applies as well to the limitations made by the agreement as to those made by the statute. In this court, it was agreed on the argument that both sides had waived that part of the limitation contained in the policy as to arbitration or appraisal, leaving the controlling question in the case to be, whether or not § 23 of the code applies to periods of limitation created by the agreement of parties. There is some contention in the brief of the plaintiff in error, although none at the bar, that, as this policy gave the assured 60 days within which to make proofs of loss, this time of 60 days must be deducted from the 12 months prescribed by the agreement, but the weight of the well-considered cases is against such a construction. See, notably, Chambers v. Atlas Ins. Co., 51 Conn. 17; King v. Fire Ins. Co., 47 Hun 1; Fire Ins. Co. v. Wells, 83 Va. 736, 3 S.E. 349; Travelers' Ins. Co. v. California Ins. Co., 19 Ins. Jour. 636; Bradley v. Phoenix Ins. Co., 28 Mo.App. 7; Johnson v. Humboldt Ins. Co. , 91 Ill. 92. But in considering the cases cited, a proper discrimination must always be observed between those policies that read, "after the loss," "from the loss," "from the time the loss occurs," and this policy, that reads, "within 12 months after the fire shall have occurred."

On the other question: While it is admitted that parties to a contract may, by express agreement, fix a limitation of time within which any action for its breach shall be commenced, even if the time fixed is less than that allowed by statute, and that in such cases of agreement the statutory limitations do not apply, yet it is insisted that the exceptions to the statutory limitations do apply in such cases. This seems to us to be an unreasonable contention, and not supported by any authority to which our attention has been called. The case of Riddlesbarger v. Hartford Ins. Co., 7 Wall. 386, 19 L.Ed. 257, says "that the rights of the parties flow from the contract. That relieves them from the general limitations of the statute, and, as a consequence, from its exceptions also."

In the case of Wilkinson v. Fire Ins. Co., 72 N.Y. 499, the policy sued upon contained a provision that no suit for the recovery of any loss thereunder shall be sustainable in any court of law or chancery, unless it shall be commenced within twelve months after the loss occurs, any statute of limitation to the contrary. The action was commenced more than two years after the loss occurred. To avoid the limitation contained in the policy, the plaintiff alleged that the insurance company had been enjoined by a court of competent jurisdiction from paying, and a third party, who claimed to...